(Bloomberg) -- Mark Maroon came to Washington three times last year to plead for relief from President Donald Trump’s tariffs, and he’s planning another trip next month -- even though he doesn’t have much hope.
Maroon doesn’t expect the administration to hold off imposing duties on $300 billion more in Chinese goods, a move that would hit products imported by Maroon’s company, which distributes specialty chemicals from its base in Ohio. With existing tariffs already costing the firm 10% of its business in lost sales, he has no choice but to make his case.
“It’s an effort in futility,” said Maroon, chief technology officer of Maroon Group LLC. “I want to be on the record, and it doesn’t hurt to try.”
U.S. trade associations and companies aren’t giving up the fight against the latest round of duties proposed by the president who calls himself “Tariff Man” as the world’s two-largest economies try to finalize a sweeping trade deal. They’re clinging to the hope -- however slim -- that the administration may spare their products, and eventually heed their warnings that the tariffs will hurt American companies and consumers.
“We’d be abdicating our responsibility if we didn’t participate, even though we do think it’s probably going to be somewhat frustrating,’’ said David French, senior vice president of government relations at the National Retail Federation. “We certainly want to help build the record that shows that this strategy is going to do a significant amount of harm.”
More Duties
Trump imposed duties on $250 billion Chinese goods last year to punish Beijing for what the U.S. sees as years of unfair trade practices. As talks faltered, he ordered this month a tariff increase to 25% from 10% on $200 billion of those products, causing businesses including Walmart (NYSE:WMT) Inc. to warn of increased prices for consumers. Trump also threatened duties on an additional $300 billion in goods, including toys, mobile phones and laptops. If the president follows through, U.S. tariffs would cover essentially all imports from Asian nation.
Companies have until June 17 to file written comments on the duties, and public hearings are set to begin that day in Washington.
Before the three previous rounds of U.S. tariffs, almost 500 individuals testified over 11 days, and thousands of comments were filed -- most like Maroon supporting a deal with China but opposing duties as the means to reach one. Firms and trade groups formed coalitions such as Americans for Free Trade, holding events across the U.S. to highlight how companies and suffering from the tariffs and China’s retaliation.
But it’s getting harder to hide from Trump’s tariff assault. Companies that succeeded in getting products removed from the initial lists now face the reality of having those goods hit with duties in the next round.
Trump’s tariffs have already hit $15.4 billion in chemicals and plastics, and the latest round would affect an additional $13.2 billion, according to the American Chemistry Council. U.S. chemical exports to China declined because of retaliatory duties, nearly tripling the American trade deficit for chemicals, the group said.
“This very well could be a negotiating tactic, but it also could be an end in itself -- that tariffs will stay for a long time, so we have to make our case,’’ said Ed Brzytwa, the council’s director of international trade.
Made In China
The administration has promised exemptions if companies can show inputs or products can only be obtained in China, and aren’t “strategically important” to Chinese industrial programs, or the duties would cause “severe economic harm.” Trump has tweeted that companies won’t face a tariff if they make their goods “at home in the USA.”
But of the more than 13,750 requests for exclusions from the first two lists of tariffs filed last year, final decisions have been reported on only about two-thirds, with more than half of them denied, according to data from the U.S. Trade Representative’s office.
The USTR said it expects the window for submitting exclusion requests for the $200 billion list will open around June 30 and that it will get 60,000 product-exclusion requests.
Company executives say many of their products are only made in China, or that reshoring production to the U.S. isn’t possible. Maroon Group, which has about 225 employees, has put off a planned expansion of its sales force because it lost customers who can’t pay higher prices from the duties, Maroon said.
More than half of the latest list of products targeted for tariffs by import value are technology goods, and the Consumer Technology Association is urging its members to come out in force with hopes of swaying Republicans in Congress and others close to the president, said Sage Chandler, the group’s vice president of international trade.
“You can’t just give up,’’ Chandler said.